If you’re in the United States, here’s how to start your LLC.
- Choose a unique name for your music business (check availability through your state's business registry)
- File Articles of Organisation with your state (typically $50-300) - alternatively you can find a business registry agency to help you do this.
- Create an Operating Agreement outlining ownership percentages and decision-making processes (see more on this below).
- Obtain an Employer Identification Number (EIN) from the IRS (free)
- Open a business bank account using your EIN and formation documents - I personally recommend modern multi-currency banks like Wise or Revolut in addition to a traditional banking institution.
This structure creates a legitimate business entity that publishers, venues, and distributors take seriously. It also prepares you for growth, adding team members, raising investment, or bringing on partners becomes much simpler with a proper foundation.
For bands, an LLC with multiple members provides clarity on who owns what percentage of the business, how decisions are made, and how profits are distributed. These conversations might feel uncomfortable initially, but they're infinitely easier to have before money is flowing. I strongly recommend creating an internal agreement for all members to sign that details:
- Each member's ownership percentage and capital contributions
- How key decisions will be made (unanimous vote, majority vote, or designated decision-makers)
- Compensation structures for both band activities and outside work
- Intellectual property ownership of songs, recordings, and brand elements
- Exit procedures if someone leaves the band
- Dispute resolution processes to handle disagreements
- Rights to use the band name and perform as the band
- Reinvestment requirements before profits are distributed
This is not legal advice but feel free to feed these points above (and any others that are specific to your project) into an AI app Like Claude or ChatGPT to help you generate the contract. It will do a job almost as well as a lawyer at a fraction of the cost.
The fact that an AI drafted the contract doesn't invalidate it. What matters is whether the contract meets the legal requirements for validity and whether the parties genuinely agreed to its terms. These legal requirements are:
- Mutual agreement (offer and acceptance) - All parties must clearly show intent to enter into the agreement
- Consideration - Each party must provide something of value in exchange (could be money, services, goods, or rights)
- Legal capacity - All parties must have the legal ability to enter contracts (proper age, mental capacity, and not under duress)
- Legal purpose - The contract must be for a lawful purpose and not violate any laws
- Clear and definite terms - The agreement must contain sufficiently specific and clear terms to be enforceable
- Genuine consent - Agreement must be free from fraud, misrepresentation, undue influence, or coercion
